TheChek News Flow

CEO Mark Zuckerberg has reviewed several designs, but has not been satisfied with any.

Meta Platforms is exploring developing artificial intelligence–powered earphones with cameras, which the company hopes could be used to identify objects and translate foreign languages, according to three current employees. Meta’s work on a new AI device comes as several tech companies look to develop AI wearables, and after Meta added an AI assistant to its Ray-Ban smart glasses.

Meta CEO Mark Zuckerberg has seen several possible designs for the device but has not been satisfied with them, one of the employees said. It’s unclear if the final design will be in-ear earbuds or over-the-ear headphones. Internally, the project goes by the name Camerabuds.

The timeline is also unclear. Company leaders had expected a design to be approved in the first quarter, one of the people said. But employees have identified multiple potential problems with the project, including that long hair may cover the cameras on the earbuds. Also, putting a camera and batteries into tiny devices could make the earbuds bulky and risk making them uncomfortably hot. Attaching discreet cameras to a wearable device may also raise privacy concerns, as Google learned with Google Glass.

Meta declined to comment.

Several other tech companies are working on AI wearables, as they seek new uses for AI that will prove as transformative as the smartphone. OpenAI CEO Sam Altman recently told an associate that he and LoveFrom—Jony Ive’s design firm—have explored building an earbud-with-camera device, the associate said. Apple is also exploring adding cameras and AI to its earbuds, according to Bloomberg. And several startups have released small AI devices in recent months, including Humane’s AI Pin and Rabbit’s R1 pocket device, though both received poor reviews. Altman and a spokesperson for LoveFrom did not respond to requests for comment.

Meta leaders including Zuckerberg and Chief Technology Officer Andrew Bosworth want to develop AI-powered earphones because they believe Meta’s competitors will pursue similar devices, one of the current employees said.

Bear Clark of Kansas-based electronics company Ear Micro, which develops “smart” earphones, licenses intellectual property and provides design support and engineering to tech firms, said interest from technology companies in developing “hearables” had exploded in the past eight to 10 months. Clark said he had recently been contacted by two big tech companies looking to develop smart earphones, though he declined to name them. Asked whether he was working with Meta, he declined to comment, citing a nondisclosure agreement. But he said Meta was, like many other tech companies, “very interested in the space.”

To make camera-equipped earbuds, the cameras could be placed on the rounded outer part of the earbud, with the goal of capturing an ultrawide angle, Clark said. Footage from the two earbuds “can then be stitched back together,” he said, creating a “complete 360-degree image.”

For companies like Meta, adding cameras to earbuds would allow users to map their surroundings. Using AI, the device could tell a user what they were looking at and how far they were from their office, for example.

And yet, as with the rush of activity around augmented reality and virtual reality devices, it’s not clear whether consumer demand for AI wearables will meet the industry hype.

Crowded Field

In 2019, Meta explored developing earphones that could be used for simple commands—asking for the time or whether a recent Facebook post had received any comments, for example—and for requesting reminders, two former employees said. However, Meta abandoned the project because leaders concluded it would be hard to stand out in the already established earphone market, the two former employees said.

In 2022, Meta filed a patent application for an in-ear earbud that bypasses the ear canal and transmits sound directly to the eardrum; the patent was granted in October 2023. The device, a prototype of which had been demonstrated internally in 2021, was designed so that audio would sound as if it was in the same space as the wearer—for example, a person speaking in the same room—another former employee said.

After OpenAI’s ChatGPT exploded in popularity, leaders at Meta started asking employees what AI-first devices they could develop, a former employee said. Since then, Meta has accelerated its work bringing generative AI to more products and has invested billions of dollars into those efforts, albeit without a clear path to recouping that investment.

Meta has also invested heavily in audio and acoustics technology, including acquiring Audio Analytic, which makes sound-recognition software, in 2022, and Whisper, developer of an AI-enabled hearing-aid system, in 2023.

But Meta has struggled in the past to develop successful hardware products. The company previously abandoned plans to build a line of smartwatches, the first of which was going to include two cameras and allow users to unclip the face of the watch to take pictures. Meta also scaled back its plans to develop AR glasses and canceled its line of Portal smart-home devices.

Portal struggled in part because it arrived years after Amazon and Google had begun selling smart-home devices that proved popular with consumers. Meta risks encountering a similar dynamic with earphones, since competitors such as Apple and Google already manufacture earphones. Meta also doesn’t make cellphones—a natural item to pair with glasses and earphones—which puts it at a further disadvantage in the hardware arena.

Designer Kim Jones is a longtime fan of the cult Italian sportswear label founded by Massimo Osti, which is undergoing a rebrand under new leadership.

PARIS — Stone Island is getting the couture treatment.

Dior has joined forces with the cult Italian sportswear label, worn by everyone from British action hero Jason Statham to rapper Drake, on a capsule collection that melds utilitarian staples with rich embellishments rooted in the French fashion house’s archives, the brands revealed to WWD exclusively.

Kim Jones, artistic director of men’s collections at Dior, is a longtime fan of the brand founded by Massimo Osti in 1982 — so much so that he is one of the faces of its upcoming campaign featuring members of its community.

“Stone Island is something that I’ve worn since I was a teenager. I could afford one piece. I remember saving up for it and it was so hard to get,” Jones said in an interview at the Dior showroom in Paris. “It was just a little sweatshirt, but with the patch, and I was probably about 19.”

The designer was referring to the buttoned badge bearing the brand’s signature compass logo that has been a beacon for subcultures ranging from the paninari teenagers of Milan in the ‘80s to British football fanatics in the ‘90s and more recently, U.S. hip-hop fans introduced to Stone Island through its collaboration with cult New York skatewear brand Supreme.

For Jones, Osti remains a key reference in menswear.

“His work is something you always look at, especially when you’re doing outerwear, because he’s one of the best in the world,” he said, lauding Stone Island for maintaining a strong brand identity. “It’s kept its DNA really strong and its technique really strong, and I just think there’s nothing like it. It means a lot to me personally.”

Jones saw parallels between founder Christian Dior and Osti in their quasi-obsessive quest for perfection. “The detail, the fabrication, the consistency: it was working with the silhouette, and refining and refining,” he said.

Owned by Moncler SpA since 2021, Stone Island is in the midst of a rebrand spearheaded by Robert Triefus, the former Gucci executive who took over as chief executive officer last year. Conversations with Dior were already underway when Triefus arrived.

“It fit very well with the vision that we have for Stone Island in this next chapter,” Triefus said. “Our intention is to reach broadly different communities and certainly the partnership with Dior will reinforce, perhaps for a more elevated customer, the values that the brand Stone Island brings to life.”

Osti, who died in 2005, was known for developing scores of new fabrics, treatments and dyeing processes, many of which found their way into the 74-piece collection, which includes ready-to-wear, shoes, leather goods and accessories.

“This is a brand and a label that was founded in a certain part of Italy that is not necessarily known for fashion per se, but for industrial design,” noted Triefus.

Stone Island is based in Ravarino in the region of Emilia-Romagna, home to the so-called “motor valley” that houses leading carmakers including Ferrari, Lamborghini, Ducati and Maserati.

Channeling Italy’s world-class manufacturing capacity, the brand has elaborated cutting-edge materials like heat-sensitive and reflective fabrics, in addition to a library of 60,000 colors.

Among its inventions is Raso Gommato, made by coating a military-origin cotton satin with a polyurethane film that makes the fabric wind resistant, and dyeing the garment with a mixture containing a special PFC-free, water-repellent finish.

The weatherproof textile was used on a number of looks, ranging from outerwear pieces like a marbled pale gray jacket with deep front pockets, to tailored options like a suit in oilskin yellow, one of the key colors in the collection.

Another example is its proprietary blend of Habutai silk and nylon. The slightly iridescent material was employed for washed black or pale green suits with Dior’s signature oblique-buttoned jacket, as well as detachable quilted waistcoats that fasten to jackets and coats using Stone Island’s so-called “dutch rope” system.

Both houses also brought their clothing archives to the table.

A field jacket from Stone Island’s spring 1988 collection, originally made of cotton and rubber, was reworked in cotton silk with a leather pocket embossed with the compass rose and Dior’s trademark cannage motif.

More surprisingly, sweaters, bomber jackets, field jackets and coats were embellished with tone-on-tone 3D floral embroideries inspired by Raf Simons’ spring 2013 haute couture collection for Dior, in a fanciful twist on the ghillie suits worn as camouflage by soldiers.

The pièce de résistance is a black raincoat embroidered with bows, rhinestones and gray bead pendants directly lifted from the Première Soirée ballgown from Dior’s fall 1955 haute couture collection.

At 80,000 euros, it’s the most expensive piece in the line, which starts at 300 euros for a keyring and runs around 5,200 euros for jackets.

“I just thought if we’re going to do it, and there is that collector of Stone Island and also of Dior that wants a special piece that they love, I think that’s a very important thing to have,” Jones said. “It’s molding the stories together in a very luxurious way.”

As a tribute to Stone Island’s color expertise, accessories include a circular leather trunk stamped with a compass rose that contains a painting kit produced with Maison Sennelier, the French store founded in 1887 that has supplied materials to leading artists including Picasso and Cézanne.

The partnership is bound to resonate with collectors, given that Dior has produced only a handful of co-branded collections, including a luggage line with Rimowa in 2019 and a capsule with Japanese label Sacai in 2021.

“Seeing those two brands together is a sign of the immense respect that each has for the other, and the legacy that each brings,” said Triefus, noting that the Rivetti family, which previously controlled Stone Island, was also highly selective in terms of brand collaborations, a strategy he plans to maintain.

These included several collections with Supreme between 2014 and 2023; a range of bags with Japanese accessory brand Porter from 2015 to 2020; a capsule with Nike Golf in 2019, and an ongoing tie-up with New Balance, with the next sneaker set to drop in June.

The capsule collection with Dior will land as Stone Island starts to deploy the next chapter of its campaign, which will include a female participant for the first time, and prepares to bring its e-commerce back in-house with a website to be unveiled in August.

“Certainly we believe strongly that this partnership will increase brand awareness for Stone Island and we can imagine that there are certain parts in the world that will benefit particularly,” Triefus said.

This includes Paris, where the brand plans to open a new store on Rue Saint-Honoré designed by Rem Koolhaas and his Rotterdam-based studio OMA before the end of the year.

The collection will be available exclusively in Dior boutiques, going on sale in Milan on June 14; Paris and London on June 18; the U.S. on June 27, and the rest of the world on July 4.

Bid by Australian mining company shows eagerness to boost exposure to copper

BHP said smaller rival Anglo American AAL -0.85%decrease; red down pointing triangle rejected a sweetened takeover proposal that valued the mining company at more than $42 billion, in what would be the biggest mining deal on record.

The move from the Australian mining giant shows an eagerness to boost exposure to copper at a time when demand for the metal is expected to rise as the world decarbonizes and supply tightens. Copper represents some 30% of Anglo American’s output, while BHP counts a majority stake in Chile’s Escondida, the world’s biggest copper mine, among its assets.

BHP said it made a revised proposal to Anglo’s board on May 7, which rejected it on Monday.

A spokesperson for Anglo declined to comment. Anglo rejected BHP’s earlier offer last month, saying the proposal was too complex and undervalued the company.

BHP said its new, all-share proposal valued Anglo at approximately 34 billion pounds, about $42.59 billion, up from its earlier bid of £31.1 billion.

Under the new proposal, BHP said Anglo shareholders would have gotten 0.8132 BHP shares for each ordinary share they own in Anglo. The proposal, like BHP’s earlier bid, is contingent on Anglo spinning off shareholdings in two South African-listed units.

BHP said it was disappointed Anglo had chosen not to engage with it on the new proposal, saying it “continues to believe that a combination of the two businesses would deliver significant value for all shareholders.”

The world’s miners are gathering this week for a conference in Miami, where the chief executives of Anglo and BHP are both expected to make presentations on Tuesday. The latest demurral is likely to increase pressure on Anglo to soon unveil its own plan to satisfy shareholders, who have been pressing for clarity about the direction of the company.

Anglo American has been cutting costs and reviewing its assets in recent months as its share price has fallen. It has held early conversations with potential buyers for its storied De Beers diamond unit, which it values at more than $7 billion, The Wall Street Journal has reported.

The rejected bid also opens the door for other miners to swoop in, with analysts and investors expecting several other industry players to at least consider their own offers.

Joe Biden’s new electric vehicle levies are symbol, not substance

Xi’s an EV lover

(It’s a song.) Why an incumbent president running for re-election has chosen to unveil largely symbolic tariffs six months before polling day I guess we’ll never know. As lots of people have already correctly pointed out ahead of the announcement, duties even of 100 per cent will mean almost nothing to the US EV market, where Chinese goods are already kept out by a combination of 27.5 per cent tariffs, plus exclusion from the Inflation Reduction Act’s EV tax breaks for consumers. The real action here is whether Chinese companies will be able to sneak autos into the US market via Mexico.

EVs thus join steel in the “purely performative” category of Biden tariffs. The president recently said he would triple steel tariffs, but because of decades of assiduous use of anti-dumping and countervailing duties, China has a similarly tiny share of the US steel market.

Predictably, the tariffs will involve a pretty blatant misuse of US trade law. The Section 301 provisions Biden is invoking were designed to counter specific instances of unfair treatment by trading partners, not serve as a catch-all excuse for bashing a rival. The EU is at least doing its anti-subsidy tariffs by the book.

The action also shows an interesting political calculation — that symbolic increases in tariffs are worth the risk of retaliation of the kind China has threatened to impose on French cognac. As well as (or, improbably, instead of) retaliation, Beijing could bring a World Trade Organization case — or it could just content itself with shouting rude words through USTR’s letterbox and running away, which would have about the same effect.

But the most important thing is this: the White House isn’t mainly bothered how quickly the US adopts EVs. EV penetration of the US car market is miles behind that of China, and indeed the EU. Sales of EVs in the US are slowing and US manufacturers are switching to hybrids. And still the administration is mainly concerned with US companies’ market share, not the size of the market.

It was clear right from the beginning of the Biden administration that the IRA and other government programmes were supposed to hit a variety of different goals simultaneously and it would at some point have to choose. The hierarchy of those goals is now evident. Having green tech (solar panels being another example) made in the US, preferably by unionised workforces, turns out to be far more important than actually decarbonising the economy.

Xi’s electric

(Another song, though others got to this one first.) Which brings us to the EU and its own EV issues. The Chinese president’s Europe visit last week caused almost as much talk of internal divisions as the Eurovision Song Contest, though if anything with a bit less geopolitical argy-bargy.

But for all the talk of divide-and-rule, Xi spending his time solemnly signing a memorandum of comradeship with Hungary and love-bombing Serbia (population 7mn, GDP smaller than Luxembourg, not joining the EU any time soon) is a bit of a comedown from the days when China assembled the “17+1” grouping of pals in central and eastern Europe.

In reality Viktor Orbán’s cosying up to Xi isn’t an existential threat to the EU as an economic and trading bloc, any more than the Hungarian prime minister’s bromance with President Vladimir Putin. Orbán is an opportunist chancer who needs to keep generating cash to finance his clientelist regime, not a principled Eurosceptic nor even an anti-democracy ideologue. His posture-striking down the years has helped to keep the cohesion money rolling in from Brussels despite rule-of-law considerations: it has not created a serious threat of breaking up the EU.

Orbán will never leave or destroy the EU because that money would disappear, along with Hungary’s precious jobs in the German auto supply chain. (It’s been said before that Hungary is an Audi-ocracy more than an autocracy.) Nor does he particularly throw his weight around in EU debates on Beijing’s behalf. The EU has created a bunch of trade tools to use against China that Hungary has not seriously attempted to block.

But won’t those German car jobs get replaced by Chinese car jobs? BYD, which is aiming to outsell Tesla in the EU by 2030, is building its first EU plant in Hungary. Well, there’s more than a touch of political and regulatory risk there. As I wrote last week, if the European Commission uses the Foreign Subsidies Regulation (FSR) against the EV manufacturing plants Chinese companies are building in Europe, things could get very spicy indeed.

In choosing whether to move against state-subsidised Chinese EV factories in Europe, the EU faces its own dilemma. Does it want to green its economy more than it wants EVs to be built by European-owned manufacturers? Unlike the US, it has already pretty much made that decision with solar panels and gone for the former option, importing Chinese solar products on a massive scale.

An FSR investigation against a Chinese auto plant in Hungary really would be a corker of a political question for the EU to face. It’s not that far in the future either. BYD wants the plant up and running in three years. Ladies and gentlemen, place your bets please!

Trade links

Chinese EV manufacturers have raised increasing amounts of money from overseas markets despite threats of trade protectionism.

Adam Tooze warns about the threat of a politically driven devaluation of the dollar.

The EU’s development commissioner warns that the EU is struggling to counter Chinese influence among low and middle-income countries.

The head of the Brussels think-tank Bruegel says that the collapse of political ties between the EU and China is more dangerous than the decoupling of trade.

Politico looks at what the EU needs if it gets a new trade commissioner after the forthcoming European parliamentary elections.

Analysts said the payment was atypical given the developer’s stretched finances and previous defaults on other offshore and inshore bonds

Chinese property developer Country Garden made payments on two onshore bonds within a grace period, avoiding default days after the company had said it might turn to a state guarantor for help.

The heavily indebted property developer said Saturday that it made interest payments totaling about 65.95 billion yuan ($9.13 billion) on two onshore bonds that had been due last week.

Country Garden said that through the efforts of “all parties, the issuer actively raised funds and revitalized the mortgage assets.” It didn’t elaborate.

The move came after Country Garden last week said that it would try to make the payments by Monday, and that if it couldn’t, it would seek the help of state-owned entity China Bond Insurance, the guarantor of the bonds. The bonds were issued in 2022 when the government provided a few private-sector “model developers,” including Country Garden, Longfor, CIFI, Seazen and others, with state-backed bonds to help them endure tightened liquidity conditions in China’s property market.

Analysts said the payment was atypical given Country Garden’s stretched finances and previous defaults on other offshore and inshore bonds in recent months.

“It is unusual for distressed developers trying to avoid another default,” Daiwa analyst William Wu said.

The payments likely won’t help restore Country Garden’s credit, and may instead weigh on already tight cash flows that could be spent on delivering projects, Wu said.

Where Country Garden got the money for the payments was also up for debate.

Morningstar analyst Jeff Zhang said the funds likely came from “additional loans or sales of pledged assets.”

Zhang added that Country Garden may have sought to avoid further default on onshore debt while focusing on restructuring offshore debt. The company is facing a liquidation petition in a Hong Kong court.

Country Garden, once one of China’s largest property developers, had more than $15 billion of international bonds and loans outstanding at the end of June 2023, according to its public disclosures. It defaulted on a dollar bond last October, and missed a local bond payment in March.

Trading in shares of Country Garden has been halted since late March in Hong Kong.

China Real Estate Information Corp., a property consulting firm, recently said that developers including Evergrande, China Resources Land, China Overseas Land & Investment, and Gemdale have around CNY30 billion principal of bonds due in May.